A number of entities have proposed various systems and methods for incorporating information collected from sensors monitoring the operation of insured vehicles into insurance pricing and/or underwriting decisions. Some of the proposals date back as many as twenty years. For example, U.S. Pat. No. 4,843,578, describing a system in which an insurance company adjusts its rates based on logs indicating how often insured vehicles exceed predetermined speeds, was filed in July of 1987. Such prior proposals have promised lower customer premiums and better risk assessment and management capabilities for insurance companies. One shortcoming, however, of prior systems and methods for utilizing collected sensor data (also referred to as “telematics data”) is that the systems fail to accurately take into account that such data is not uniformly informative for all customers and properties being insured. This shortcoming may explain why, in twenty years, no insurance company has effectively commercialized an insurance product that takes into account the results of remote property monitoring. The relationships between various characteristics of insured customers, insured properties, and sensor data as they relate to risk are complex and intertwined.
Thus, a need remains in the art for a system and methodology of effectively utilizing data collected from sensor monitoring insured property based on these complex relationships.